Financial services need more women: Here’s how we aim to fix that

As we celebrate International Women’s Day and Women’s History Month, we recognize the contributions women have made to history, culture and society as well as the gains they’ve made politically, socially and economically.

Those contributions are many and the gains are significant. But some areas—such as financial services—still have a long way to go.

Financial services need more women

A study from the U.S. Government Accountability Office found female leadership at financial services companies remained stagnant between 2007 and 2015. In 2019, women’s representation on executive committees at major financial services firms in the U.S. was only 26 percent, according to Catalyst.

But it’s not just company leadership where women are underrepresented in financial services. A Morningstar study on the fund subsector (mutual funds, hedge funds and the like) found that when it comes to gender diversity, there’ve been zero improvements in the past 20 years. At the end of 2000, 14 percent of global fund managers were women. As of 2019, that percentage remained unchanged. In the U.S., the statistics are even worse, with women representing only 11 percent of fund managers.

How can this be? We know the benefits of workplace diversity. We also know from the principles behind ESG investing that diversity and inclusivity can be material factors in determining a company’s ability to navigate new risks, attract talent and investment and, ultimately, build sustainable profits.

We’re committed to closing the diversity gap.

Improving diversity is at the core of our values

As a firm, we’ve done a lot of work over the past few years to increase diversity in our own ranks, particularly in leadership. In our client-facing operations, for example, we doubled the number of women in leadership roles from 2017 to 2019. In 2020, it grew by another 28 percent. We’ve also appointed more women to the firm’s executive committee, ensuring women’s voices are represented at the highest levels of leadership.

Now we’re expanding those efforts to better involve our clients, support our communities and lead our industry. One area where we’re seeking to drive change is with the third-party fund managers that we make available on our platform. RBC Wealth Management holds strong relationships with these asset managers and we believe we can lean on those relationships to encourage change.

To that end, we launched a data campaign in conjunction with eVestment to determine just how diverse the funds we currently recommend are. Information is power and right now there isn’t a lot of data on diversity in this space.

Through the campaign, we’re collecting approximately 11,000 data points around diversity. Many of these data points were not previously filled out, which means our insight into the diversity of our funds was lacking. As a result of our coordinated request, almost 3,500 data fields were updated.

The survey is ongoing, but so far, of the 227 strategies the survey has collected data on, only nine have portfolio management teams comprised of at least 33 percent women. And five of those strategies are from the same fund manager.

We see this as just the starting point. We plan to work closely with eVestment to send this same request to as many managers in their database as possible. We plan to use the data to help drive increased diversity among the managers with which we do business.

Using data to improve diversity and inclusion

Moving forward, RBC Wealth Management will commit to ensuring diversity metrics and analysis are included in our fund manager research. Part of that commitment will involve encouraging the asset managers on our platform to strongly consider diversity in their hiring practices, particularly within their investment teams.

We’re also expanding our research scope to seek high-quality managers who traditionally haven’t received equal opportunities within the industry. Often a lack of assets under management or shorter track records may have resulted in fund managers being precluded from initial asset class screening. As we receive better data and expand our scope, we believe we can help improve opportunities for high-quality and diverse asset managers who may not have been considered in the past.

Together with our Diversity & Inclusion values, and the work we are doing, we must ensure we take an active and visible role in advancing equity and inclusion in our industry, the broader community, as well as among colleagues.